Your next text may come from a retailer

As email falls out of favor, more retailers test text-message transactions

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By

KathleenBurke

Reporter

Nobody likes spam.

In an effort to break through the noise of app notifications and emails, companies have begun to use text messages as a way for customers to buy products and services, and experts are concerned that your phone’s text message inbox could become just as cluttered as your email. You may be grateful to receive a text to tell you that your flight is delayed (before you leave for the airport), but do you really want to hear from your local store about a deal on detergent?

“We’re in a fortunate position right now, in many cases, [text solicitations] have not crossed the line,” says Ryan Buell, a professor at Harvard Business School. “But it’s only a matter of time.”

Texting is easy, seamless and immediate. Nearly 40% of Americans said they sent or received a text message “a lot” the day before being surveyed, with 68% of respondents ages 18 to 29 saying they texted frequently in that period, according to a 2014 Gallup poll of about 1,000 adults.

Nordstrom
JWN, +3.64%rolled out a TextStyle service in May 2015. After setting up an online account with your mailing and payment information, a salesperson will text you items you may be interested in, and by responding with the given code, the transaction is immediately processed. Up to 12 items can be offered and purchased in one exchange. (The company doesn't release numbers on how many customers have used TextStyle since its introduction, but a Nordstrom spokesman says it will continue to develop the service.)

Sporting events and teams are using text messages to release last-minute offers. ReplyBuy, a text message buying service founded in early 2013, began focusing on the sports market in October 2014 and saw 540% growth in users in the fourth quarter of 2015. The company has partnered with more than 70 professional and college sports teams to text you pricing information for extra tickets when they become available. By creating an online account with your team preferences and payment information, the service can immediately send available tickets to you via text if you respond “BUY” along with the number of tickets you want.

ReplyBuy is starting in the sports and entertainment space, but plans to partner with other types of retailers in the future, says Josh Manley, the company’s chief executive. By reaching customers directly instead of having them go through a website or download an app, Manley says ReplyBuy has “removed buyer friction” with the retailer.

Texting between customers and companies will become significantly more common in the next couple of years as the use of artificial intelligence develops, especially in sectors like customer service and travel, says Ben Kosinski, head of Kosinski Ventures, which invests in ReplyBuy. “It’s a lot easier to just message a company the exact question you want to be answered,” he says.

However, the manner in which companies use these services can determine their future success. Nordstrom’s TextStyle and ReplyBuy are what Harvard’s Buell calls “opt-in” services, where customers can choose to receive messages from the companies. “They’re adding a channel of communication that’s not at the expense of adding something else,” he says.

By allowing customers to opt-in to text transactions, companies can allow them to “prune” the content that comes into their inbox, Buell says. However, if companies begin employing opt-out services — where once they have access to a customer’s phone number they can text it as much as they want until a customer requests to be taken off the contact list — texting may go the way of the email, with customers ignoring messages altogether, Buell says. “If this access begins to be abused, the relationship between companies and customers will erode very rapidly,” he says.

And there is good motivation to keep customers happy. This loss of consumer trust could be especially detrimental to companies like ReplyBuy that depend on those interactions for their business platform. However, Manley says this problem could be avoided if companies collaborate. “People are selective, and that’s the reason we’ve been so successful,” Manley says.

“There has to be a balance,” says Kosinski. “Companies are going to learn where that balance is as they experiment more.”

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